Most people are aware they can claim some medical expenses on their tax return, but many don’t keep a running tally because they simply forget or don’t think it will add up to worthwhile savings. That’s a potentially costly mistake, say tax experts as many medical tax deductions often overlooked.

“I put it down as being one of the most well-known and least-utilized [tax credits],” says Alan Rowell, tax specialist and president of Hamilton, Ont.-based Accounting Place.

The tax credit applies to any number of medical expenses — including prescription drugs, eyeglasses, health-related private nurses and personal support workers, dental work and even buying gluten-free bread or medical marijuana.

Last year, the government added blood coagulation monitors for people who need anti-coagulation therapy to the list of eligible expenses.

“If you don’t start adding them up, you’ll never know,” said Rowell.

The list of medical expenses eligible for a tax credit is exhaustive, and we have highlighted some the less familiar ones below.

The caveat is that the government automatically deducts the lesser of either $2,109 or three per cent of your net income from a person’s total medical expenses. For some, that means the credit might be negligible or even non-existent, but for others it’s definitely worthwhile to make a claim.

Keep receipts

You do need to do some homework, in terms of keeping your medical expense receipts. It’s something that is not easy to do over the course of a year unless you make a conscious effort to put the receipts aside, Rowell says.

Knowing what to claim

While most tax software programs do a good job of prompting you about available credits and deductions, they don’t necessarily take into account all the specifics of your particular situation. They will ask you about medical expenses, but you still have to know what expenses to claim.

For those who make the effort, anything over the amount automatically deducted by the Canada Revenue Agency means money in your pocket.

One detail to be aware of is that your medical expenses don’t have to fall within the calendar year but can be claimed for any 12-month period that ends in 2013. So, if you had a number of unclaimed medical expenses over several months in 2012, you can combine them with expenses from 2013 as long as they fall within a period of 12 consecutive months.

However, that means you must use the same period when claiming medical expenses for your dependants.

Another time-saver that Rowell recommends is to contact your local drug store — where you usually get prescriptions — to see if they can provide one single receipt for the whole year, thereby avoiding the hassle of compiling 12-months worth of receipts.

There is also a refundable tax credit for working people on low incomes who have high medical expenses.

Disability tax credit not negligible

Another of the most often overlooked credits is the disability tax credit — which coincidentally happens to be the most lucrative non-refundable tax credit, worth $1,500 or more in real money depending on the province for the tax filer, or up to $2,400 for a taxpayer with a disabled child.

‘We can get into some real money, and people just don’t realize it.’
— Alan Rowell, Accounting Place
The credit is intended for those with severe and prolonged physical or mental impairments. To be eligible, the disability must significantly restrict activities of daily living, including walking, eating, speaking or some combination thereof. A physician or licensed practitioner must complete and certify the medical section on form T2201.

Rowell says part of the reason it is often missed is because it is poorly named.

“I think they should call it a restricted quality of life tax credit, because I think that’s really what it is,” he says.

The disability tax credit can be claimed retroactively up to 10 years if a person has been experiencing eligible impairments but has only now applied for the credit. That can add up to a major tax refund.

“We can get into some real money and people just don’t realize it,” Rowell says.

The credit can also be transferred to a spouse or other family member, he adds.

Rowell recommends a person speak with their doctor if they think they might qualify for the disability tax credit.

“It’s one of those things,” he says. “If you don’t ask, you don’t get.”

Good advice for anyone looking to reduce the amount of tax they have to pay each year, medical expenses included.

Some eligible medical expenses

It appears the CRA has dealt with every possibility for health care expenses, which has made for a wide range of products and procedures that can be claimed. Some you may know, some you should know and some are downright surprising. Below is a list of some of the treatments, devices and procedures that qualify as medical expenses.

Air conditioner — The lesser of $1,000 and 50 per cent of the amount paid for the air conditioner for an individual with a severe chronic ailment, disease, or disorder — prescription required.

Attendant care expenses — Attendant care expenses are amounts you or your spouse or common-law partner paid for attendant care or care in any of the following places:

Self-contained domestic establishments. [Clients private residence]
Retirement homes, homes for seniors, or other institutions.
Nursing homes (full-time care).
Special schools, institutions, or other places (providing care or care and training).
Group homes in Canada.
Bathroom aids — To help a person get in or out of a bathtub or shower or to get on or off a toilet — prescription required.

Tutoring — The cost of tutoring services that are supplementary to a primary education is eligible as a medical expense if the person receiving it has a learning disability or a mental impairment and has been certified by a medical practitioner as requiring tutoring because of the disability.

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